ARC’s Blockchain Bifrost
“I haven’t been everywhere, but it’s on my list”
Blockchain technology has spawned a vast array of exciting projects and protocols to discover, but exploring all the crypto world has to offer can be challenging. Thankfully, ARC is making this easier with our Bridge, which can magically transport your digital assets between different chains via the intuitive and powerful interface that you know and love.
Like all of ARC’s efficient products, the Bridge offers up to 30% cheaper and 50% fast transactions than competitors.
Imagine you have 0.35 Ethereum available to swap for a diversified portfolio of microcap cryptocurrencies that aren’t listed on centralized exchanges. Even with the famously low gas fees on ARC’s DEX swap aggregator, making five transactions for five different currencies might result in some $200 worth of fees, eroding your portfolio by 20% even before you really get started. And don’t even think about attempting to trade such small amounts, as buying and selling will quickly result in fees accumulating to more than the portfolio is worth.
“We build too many walls, and not enough bridges”
One of the possible solutions to this problem is to firstly bridge your Ethereum assets over to a lower cost chain such as Polygon ($MATIC). Once successfully bridged, you can then buy and sell Polygon-supported tokens to your heart’s content with fees amounting to only a fraction of a dollar. However, as with any blockchain transaction, there are costs that apply to bridging the funds over. In addition, unlike the title of this document, Marvel’s Bifrost Bridge, crypto assets can sometimes take a little longer to make the journey between chains depending on bridge congestion, certainly longer than simple transactions like sending or swapping funds on a single layer one.
Due to bridge fees it is usually more efficient to move a larger volume of funds a single time than to constantly shuttle assets back and forth.
If this is still a bit confusing, let’s look at an analogy. Imagine you live in California and have US$10,000 available to spend on a nice vacation. You could holiday within your own state, which would be a lot less hassle and still very enjoyable, but the downside is having to pay high costs for hotel accommodation, a rental car, restaurants, and activities in a relatively expensive part of the world. An alternative would be to book flights to Cambodia, a country in Southeast Asia, and spend your US dollars there where those same purchases are far cheaper, making your budget stretch further. But just like bridging crypto assets, there is a monetary and time cost to flying to another country and it wouldn’t make sense to do so for just a day, plus there may be a more limited selection of purchase options once you arrive at your destination.
Bridging has other benefits than just cheaper transactions though. For example, DeFi protocols may have opportunities that are only available on certain chains. ARC’s Bridge will initially allow users to move three core currencies: ETH, USDT, and USDC. Additional assets including BNB, MATIC, and wrapped BTC will be available at a later date. Bridging will be supported between three major chains: ETH, BSC, and MATIC. As with all ARC products, the Bridge will be improved over time to support a wider range of currencies and chains. It will also serve as the foundation for implementing cross-chain swaps.
Yes there are fees! None of which are controlled or collected by ARC at this stage though. The first two fees are clearly specified on the transfer quote screen, and are levied at the start of the bridging process to move the asset off the original chain and onto the Bridge. There are also network fees to access and process funds that apply as per wallet prompts. In the future, we intend to add a small fee that will be included for revenue share.
Just like other blockchain transactions, users need to ensure that they have the appropriate assets ready to cover bridging fees, especially for the final fee as otherwise assets may be temporarily “stuck” on the Bridge.
But don’t worry, a more detailed step-by-step guide will be provided in conjunction with the product release. But even with a guide, bridging is still a complex undertaking that is best suited to users who are more experienced in the world of DeFi.
Further reading and study that is beyond the scope of this document is recommended for beginners. Please bridge with care.
In addition, please remember that like other ARC products, the Bridge is an Alpha release. We would encourage all users to check in with our helpful community with any queries. Happy bridging!
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